Will the US coal industry go up in smoke?

The next few years could see more than 20% of current US coal production disappear.

Increased environmental regulation and steep declines in the price of natural gas are the two main causes, according to a new report from CoBank.

Taylor Gunn, Lead Economist and Report Author at CoBank, said: “The past five years have been extraordinarily taxing for the US coal industry. Market forces have coalesced to create significant headwinds for the coal producers working to keep their businesses sustainable in the future.”

Dozens of US coal mining companies declared bankruptcy in the last five years and the number of operating coal mines has dropped from 1,013 in 2009 to under 400 in 2016, the report states.

The country’s coal usage fell by 40GW, i.e. 21% or around 200 million tonnes during 2011-15.

Mr Gunn however adds all is not lost for the industry: “The US coal industry is shrinking, not dying. The US power sector will continue to define the domestic coal industry and the lowest cost and cleanest burning coal will remain in high demand.”